“In my last article, I talked about Apple’s destiny as a Dividend Aristocrat,” Michael Foster writes for Forbes. “The company doesn’t have even five years’ worth of payouts under its belt, but there are clear indicators that it will never struggle to pay dividends.”
“The company’s strong—and rising—free cash flow and its operating margin, which has surged over the last 20 years and stayed at historically high levels, indicate that Apple has turned into a cash-producing machine investors should not ignore,” Foster writes. “Ironically, many people don’t see Apple as a cash machine when they buy or sell the stock; instead, they obsess over iPhone and iPad sales. This leads to a panic when these sales are weak and euphoria when they’re strong.”
“But this short-termism is destined to lose because buying and holding Apple will mean collecting a dividend that will grow faster than those of supposedly ‘safer’ and more boring stocks like General Electric, AT&T, Johnson & Johnson, Chevron, Consolidated Edison and Exxon Mobil,” Foster writes. “Yet Apple is the cheapest stock among this group when we look at its price-to-earnings (P/E) ratio.”
Read more in the full article here.
MacDailyNews Take: As Jim Cramer says of AAPL, “Own it, don’t trade it.”